By Andrew Jay Rosenbaum
ANKARA
The Eurogroup meeting with the Greek government delegation in Luxembourg on Thursday is the last chance for compromise, as an agreement hangs by a thread.
Without significant progress towards an agreement today, Greece is expected to be unable to meet its approximate $2 billion in payments this month to the International Monetary Fund.
Although Greek Deputy Finance Minister Dimitris Mardas said Wednesday that the country could make the payments, stock markets in Europe and Asia world saw declines amid default fears.
In Europe, on Wednesday, France's CAC 40 fell 1.2 percent to 4,781 while Germany's DAX was 0.7 percent lower at 10,966. Britain's FTSE 100 was down 0.6 percent to 6,673.
Asian stocks were also lower Thursday over Greek bailout jitters. Japan's Nikkei opened 0.13 percent lower and Hong Kong's Hang Seng dropped 0.1 percent in morning trading.
However, in the U.S., stocks rose slightly after the Federal Reserve held interest rates, and hinted that a rate hike would be delayed until the end of this year. The S&P 500 Composite Index gained 4.13 or 0.20 percent to 2,100.42.
While an actual formal agreement is unlikely Thursday between Greece and its creditors, enough progress must be shown so that Athens can hope to unlock the next 7.2-billion- euro ($8.2 billion) tranche of bailout funds remaining before the program expires in two weeks.
What is needed for compromise?
The possibility of a compromise is still very real, despite continued protestations from Greek Prime Minister Alexis Tsipras that creditors are "pillaging Greece", and that the government will not back down from its current position.
A report Wednesday from the Greek central bank made a strong case for a compromise and warned of crisis and recession if an agreement is not reached.
The sticking points are few, but they are important. They include:
Primary budget surplus: There is agreement that a one percent surplus is sufficient in 2015 but creditors want a larger amount than Athens for 2016;
Pension reform: Both sides have agreed to pension reform but the amount to be shaved from pensions is still in dispute;
Value-added tax: There is still a big split here, as creditors demand a fixed rate of 23 percent but Greece wants different rates on specific categories of goods like medicines.
Labor-market reform: Athens is still demanding to keep collective bargaining by unions for contracts.
With these remaining sticking points, it is clear that the gap is not great between creditors and the Greek government, but the devil is in the details.
Each party says that the ‘ball is in the court’ of the other. The meeting today will be the last match.
